Are Trumpβs tariffs hurting US consumers? Here's what the data says
A series of new economic analyses released Wednesday, several conducted by the federal government using official data sources, point to slowing economic growth and increased consumer prices brought on by President Donald Trumps trade war.
Despite such indicators, however, the White House has shown no sign of backing down on Trumps trade agenda, moving forward with plans to double the tariff rate on imports of foreign steel and aluminum and pushing ahead on bilateral trade negotiations with countries around the world.
In a statement to Scripps News, White House Deputy Press Secretary Kush Desai dismissed concerns about poor economic indicators, arguing Trump administration policies ushered in historic job, wage, investment, and economic growth in his first term, and theyre laying the groundwork the repeat the success in his second term.
Taken together, however, the new data contradict months of White House messaging suggesting foreign producers and not American consumers would bear the brunt of tariff costs, and raise fears of an economic downturn brought on by global trade imbalances.
Over the summer, I think you're only going to continue to see these soft data numbers turn into hard data, and only going to see some more slowing in the economy, said Alex Jacquez, who worked on economic policy in the Obama and Biden administrations and now directs policy and advocacy work for the progressive Groundwork Collaborative think tank.
The president began the day on Wednesday, reiterating his call for Federal Reserve Chairman Jerome Powell to lower interest rates, highlighting a new report from payroll processing firm ADP that showed U.S. employers added just 37,000 jobs in May the lowest private-sector job growth in over two years. Economists surveyed by the Wall Street Journal had estimated much stronger growth of 110,000 jobs in May.
Then came new research from Liberty Street Economics, a blog run by economists with the Federal Reserve Bank of New York, that found a majority of businesses in that jurisdiction passed along at least some of the added costs of tariffs onto consumers. Relyaing on data from a survey conducted during early May when the 145% tariffs on Chinese imports was still in effect the economists found a significant share of businesses also raised prices on goods not impacted by tariffs, suggesting firms were using Americans' widespread awareness of tariff-related economic uncertainty to justify price hikes across the board.
The Feds monthly Beige Book released later Wednesday pulling together data from all 12 of its districts echoed such trends.
All Districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions, Fed officials wrote, adding that higher tariff rates were putting upward pressure on costs and prices.
Also on Wednesday afternoon, the nonpartisan Congressional Budget Office released its first analysis of the impact of Trumps tariffs on the U.S. economy more broadly, projecting a slight slowing of GDP growth and an increase in consumer prices brought on by Trumps tariffs. Federal government deficits would decline substantially due to the added revenues tariffs bring in, the CBO projected, but increased prices would drive up inflation by nearly 1% by 2026.
White House officials declined to comment on such findings, suggesting instead that reporters should take CBOs tariff revenue estimate of $2.8 trillion at face value, which together show a $500 billion deficit reduction over 10 years.
Behind the scenes, meanwhile, trade negotiations conversations between U.S. and foreign officials continue, with mixed success.
Following President Trumps late-May threat to levy a 50% tariff on imports from the European Union, U.S. Trade Representative Jamieson Greer met Wednesday with European counterparts in Paris for what was described as a very constructive conversation that indicates a willingness by the EU to work with us to find a concrete way forward to achieve reciprocal trade.
We are advancing in the right direction at pace, echoed European Union trade commissioner Maro efovi following the meetings. I believe we can achieve positive result, efovi added, But we are also ready to defend our interests and do the utmost to rebalance our trade relationship.
Yet, progress towards a trade agreement with China, with which the U.S. maintains the largest trade deficit, remains elusive.
Treasury Secretary Scott Bessent admitted last week that trade conversations with his Chinese counterparts were a bit stalled. Meanwhile, Beijings official readout of Tuesdays first meeting between U.S. Ambassador to China David Perdue and Chinese Foreign Minister pointed to continued friction between the nations.
In recent weeks, the U.S. has introduced a series of negative measures for groundless reasons, infringing upon China's legitimate rights and interests, the Chinese statement read, suggesting the nation firmly opposes such actions.
Though senior White House officials said Monday that Trump would connect with Chinese President Xi Jinping this week, no call had yet been scheduled as of Wednesday afternoon.
I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!! Trump wrote on Truth Social early Wednesday morning.